The Proposal
The purpose of this document is to present a business idea for the development of the Virtual Learning Space (VLS) for the online streaming industry. More specifically, this media product will present an interface and the category of short interactive videos, targeted at the development of specific skills, knowledge, and awareness among targeted population group. That said the product will consist of several twenty to thirty minutes’ videos, supported by the opportunity of interactive test and Q&A blog sessions. Importantly, the VLS will be licensed to only one online streaming provider, but “fed” by a variety of developers from Educational field, such a Harvard Research Center, Pew Research Center and other credited institutions.
Justification of Choice
Current Situation
The choice is determined by the two latest trends, identified in the social and technological environments. First, social environment is changing rapidly. The globalization and international mobility of individuals, coupled with increased need for time-saving and digitalization of demand create new societal reality. This means that individuals in Generations Y and Z are significantly more tech-savvy and are ready to adopt to individual and personalized learning strategies. Moreover, international ability leads to higher diversity and builds on the need to become more emotionally intelligent and aware. Finally, many argue that to succeed in social and business environments, individuals should become more innovative and creative to be able to grasp the opportunities in personal and professional life and become more resilient at the times of crisis. This resilience comes from adaptability and ability to learn on demand (Keller and Horn 2003). That said, new generations, such as Gen Y and Z will continuously look for learning opportunities, which offer flexibility, accessibility, and quality.
Secondly, the technological environments created a new competitive landscape for traditional television. Cable TV and DVD market compete today with strong streaming, who take significant market share from these giants. Netflix alone is present in 190 countries and has over 75 million users, attracted by accessibility and price of the service (Netflix 2015). This trend makes the potential of market diversification through entering the educational industry through VLS service especially attractive for online streaming organizations.
How Education Interface Fits Online Streaming (Netflix)
As it was previously mentioned, organizations, like Netflix compete on the market with traditional cable TV and DVD. Moreover, Netflix specifically, offers its viewers a clear advantage of unique Netflix Series, which include TV shows, documentaries and movies, developed by Netflix licensed outsourced production firms in the countries, where the company operates (Kovacs and Jansen 2015). Competition in all the markets, however, is becoming more severe, as production studios, such as Disney and other start entering the online streaming business and Cable TV offers more savvy and affordable packages for their loyal customers. With that in mind, product diversification to offer a one-stop-shopping is central to the strategy of Netflix. Considering the possibility to tap into the constantly growing education market, it is expected that VLS will be the right fit for the media category. Additionally, it is possible to see that the level of acceptance of Virtual learning experience is significant as the online educational courses and distance learning has grown dramatically at a rate of 9.9% over the past three years, reaching USD$ 49,9 in 2015 (Pappas, 2015).
Market Strategy
Target Audience
Given the technological development and widespread of Netflix globally, it is possible to conclude that VLS services will bring benefit to the three major customer categories:
Business professionals on entry and junior management level;
Entrepreneurs in all the sectors.
That said there are several common drivers of the decision-making process of the categories of the target market, which will build on distribution and marketing strategy of the VLS service in the online streaming industry. These drivers include (1) non-location linked learning, (2) low price, (3) extreme interactivity, (4) continuous innovation and reliance on the latest trends in the educational industry.
Distribution Channels
Based on the type of the service and its mutually dependent relationships with the online streaming as a media channel, the core distribution channel for the VLS product should be Netflix service specifically, where the VLS services will be separate in additional “profile” category and paid for separately with progressive discount for number of users and completeness of the service.
Risk Analysis
There are many environmental factors that should be included in a comprehensive risk analysis. The major considerations for the success of this endeavor, however, include the feasibility of the contract with solid and well-known education providers. The failure to gain the content from such universities, as Harvard, London Business School, Nielsen or Pew Research center can undermine the proposition and perceived the quality of VLS. Additionally, the development of the product and the continuity of the same demand relatively investment-heavy strategy from VLS service as well as its “host” (Netflix). In the situation, where Netflix is not able or interested in funding the development, the entire project can be suspended.
Conclusion
VLS service in online streaming channels is an innovative and high-potential project, which can benefit several groups of stakeholders in different generations. Additionally, it can build on increased competitiveness of online streaming companies, such as Netflix, which must constantly look for the ways to diversify and increase the switching costs for its customers. The proposal can be successful as it is built on the proposition of partnership between the solid organization in a media environment with the large audience and innovative product, which can enhance the Netflix brand.
References
Keller, M. & Horn P., 2003. Strategic Management. 2nd Edition. Journal of Literature, 12(5), pp.66-89.
Sherman R. & Waterman D. 2014. Technology and Competition in the US Television: Online vs. Offline. Policy and Marketing Strategies for Digital Media. New York: Routledge Publishing: 266-279.
Kovacs G. and Jansen J. (2015). An Analysis of Strategic by Netflix in Television Market. Department of Business Administration Aarhus University. Available at: 2016, http://pure.au.dk/portal-asb-student/files/86448002/Thesis_GaborKovacs_201208049.pdf [Accessed 16 January 2017]
Netflix (2015). Netflix Annual Report Form 10-K. Netflix Official Website [Online]. Available at http://files.shareholder.com/downloads/NFLX/1977347726x0x888138/AA03EFB6-6166-4543-BE29-A0E09ED91B82/SEC-NFLX-1065280-16-47.pdf [Accessed 16 January 2017]
Pappas, C. 2015. Top eLearning Statistics and Facts for 2015. Elearning Industry [Online]. Available at https://elearningindustry.com/elearning-statistics-and-facts-for-2015 [Accessed 16 January 2017]
